Rotten Revision

Recently revised GDP numbers show that GDP in Q1/15 grew at 0.6% not by -0.2%, but also revealed that GDP growth was just 2% between 2012 and 2014, not 2.3%, a sizable reduction. This means labor productivity growth is worse than earlier dismal readings suggest. Given such weak productivity growth, GDP can’t grow fast. Thus waiting beyond September to raise rates hoping things get “much better” is waiting for Godot.